Treasury Bill Demand Surges: Investors Bid KSh 75.37B for KSh 28B as Yields SlipTreasury Bill Demand Surges: Investors Bid KSh 75.37B for KSh 28B as Yields Slip
Key Highlights
- Investors bid KSh 75.37B for the KSh 28B of Treasury bills on offer on 8 October, a subscription of 269.3%.
- Average rates fell on all three maturities, with the one-year bill at 9.035% and the three-month bill at 8.762%.
- The government accepted KSh 45.50B, well above the amount it advertised, as the three-month bill drew the most interest.
Kenyan investors queued up for government paper this week, bidding almost three times the amount on offer while the returns they accepted edged lower.
Bids at the Treasury bill auction on 8 October reached KSh 75.37B ($0.58B) against KSh 28B ($0.22B) advertised, a performance rate of 269.3%, according to the Central Bank of Kenya weekly bulletin of 9 October.
A Treasury bill is a short-term loan to the government, repaid after 91, 182 or 364 days, and the average rate is the return investors accept for lending.
The central bank accepted KSh 45.50B ($0.35B), more than the KSh 28B it had advertised. That is in line with a pattern from the previous week. Mwenendo earlier reported on how investors bid KSh 47.7B for the same KSh 28B offer on 1 October, so demand rose by roughly KSh 27.67B ($0.21B) in a week.
Three-month bill takes the lion's share
The 91-day bill drew the strongest interest. Investors bid KSh 50.20B ($0.39B) for KSh 8B ($0.06B) on offer, and KSh 20.45B ($0.16B) was accepted at an average rate of 8.762%, down from 8.769% a week earlier.
The 182-day bill attracted bids of KSh 15.53B ($0.12B) for KSh 10B ($0.08B) offered, with KSh 15.43B ($0.12B) accepted at 8.874%, against 8.886% previously. The 364-day bill was almost exactly covered: bids of KSh 9.64B ($0.07B) against KSh 10B offered, with KSh 9.63B ($0.07B) accepted at 9.035%, down from 9.040%.
All three rates fell week on week, though by small margins. The biggest move was 0.012 percentage points on the 182-day bill.
What lower yields mean for savers and borrowers
For savers who hold Treasury bills directly or through money market funds, slightly lower rates mean marginally smaller returns, although the differences this week are tiny. For the government, heavy demand lowers the cost of covering its short-term borrowing needs.
The auction came a day after the Monetary Policy Committee kept the Central Bank Rate at 8.75% on 7 October. The bulletin shows the overnight interbank rate averaged 8.75% from 2 to 8 October, unchanged from the week before, with an average of 17 deals worth KSh 5.88B ($0.05B) a day, against 14 deals worth KSh 9.50B ($0.07B) the previous week.
Mwenendo also reported on how the weekly Treasury bill cycle works, and why it affects rates across the economy. The next auction will show whether investors keep bidding at these levels as the central bank holds its key rate steady.
In Summary
- What happened at the Treasury bill auction?
- Investors bid KSh 75.37B for KSh 28B on offer, a performance rate of 269.3%, and KSh 45.50B was accepted.
- When was the auction?
- On 8 October 2026, with the figures published in the CBK weekly bulletin of 9 October.
- Who runs the auction?
- The Central Bank of Kenya, on behalf of the government.
- Which bills drew the most interest?
- The 91-day bill, with bids of KSh 50.20B against KSh 8B offered.
- Why does the auction matter?
- It sets the return on short-term government debt and shows how much money investors want to lend to the government.
- How did rates move?
- Average rates fell on all three bills: 91-day to 8.762%, 182-day to 8.874% and 364-day to 9.035%.